IES MCRC

COST ANALYSIS OF BRITANNIA BREAD

Eat Healthy, Think Better

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Cost Analysis - Britannia Bread

This is to certify that the Project titled: Cost Analysis of Britannia Bread has been submitted by: • • • • •

Atul Ratnapakhi Reshma Rasal Sheetal Rathod Sneha Patil Vikas Rathod Vineet Saraf

Towards fulfillment of the requirement of PGDM course 2008 – 2010 and has been carried out under the guidance of Prof. Jayesh Jain at the Indian Education Society’s Management College & Research Centre. The information submitted is true and original to the best of our knowledge

_____________ Guide: Place: Date:

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Prof Jayesh Jain

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Cost Analysis .Britannia Bread DECLARATION We hereby declare that this report submitted in partial fulfillment of the requirement of the award for the Post Graduate Diploma in Management Studies to IES Management College is our original work and not submitted for award of any titles or prizes. the analysis is original. We further certify that we have no objection and grant the rights to the IES Management College to publish any chapter/ project if they deem fit in journals/ Magazines and newspapers etc without our permission. : Sneha Patil (76) Reshma Rasal (82) Sheetal Rathod Vikas Rathod (84) (83) Atul Ratnaparkhi (85) Vineet Saraf Class : PGDM 1st year (86) Division: B 3 | Page . Place Date Name : Mumbai : 2nd September. 2008. While the data required for analysis has been sourced from various magazines. books and portals.

We are grateful to many Tran generational source and roots of wisdom that helped us to make this project viable and also on the right time. even beyond the four walls of the classroom. I am indebted to IES Management College and Research Centre and University of Mumbai for this golden chance 4 | Page . We are very grateful to Prof. Jayesh Jain for giving us the fine opportunity by making us move out of the four walls of classroom and taking the practical look. The material and arrangement has slowly evolved and has imbued those who has deeply and sincerely immersed in it.Britannia Bread ACKNOWLEGDEMENT One is filled with great sense of pride when students are able to distinguish themselves in works. This work is synergistic product of our mind.Cost Analysis .

No 1 2 3 4 5 6 7 8 9 Bakery Industry Introduction To Britannia Industry Britannia Daily Fresh Bread SWOT Analysis Cost Sheet Cost Sheet Analysis Conclusion Bibliography Topic An Introduction to Food and Beverage Sector Page No 06 07 08 09 10 11 14 17 18 5 | Page .Cost Analysis .Britannia Bread Index Sr.

the food and beverage industry is in a dynamic phase. etc. beverage. Britannia. Pillsbury. awareness campaign about products in urban as well as rural areas. confectionery. beverages such as tea. food and beverage sector is expected to grow at a high rate. and large scale transformation. Pepsi. the growth and development of food manufacturers in the market depends on having prudent strategies in place. HLL. chocolates.. The Surya Food and Agro Private Ltd. The food and beverage industry is primarily driven by consumer health trends..Cost Analysis . 3584 billion. India produces above 600 million tonnes of food products every year and is one of the major producers of food in the world. milk and dairy products. This sector holds a huge potential to grow because of the increase in advertisement spending. ITC.5% in 2005-06. which can be applied globally. India's Food and Beverage industry is valued at Rs. biscuits etc. juices. coffee. Mars. bottled water etc. Nestlé. growing awareness among consumers about health products. Dabur. The food and beverage industry registered a growth rate of 8. Marico. Cadbury. 6 | Page . which fosters growth of participants with a clear vision of "growing with their customers. this has created a highly competitive market place. Amul. and increasing popularity of convenience foods. rapid urbanization. Conagra.Britannia Bread AN INTRODUCTION TO FOOD & BEVERAGES SECTOR The multi-billion food and beverage industry comprises several markets including bakery products such as bread. With increase in disposable income of consumers. In effect." The major players in the "Food and Beverage" Industry is: Heinz. snack food. marked by a high degree of competition. As product development within the food and beverage market moves towards a focus on health and nutrition. Smith Kline Beecham. Presently. processed foods and others.

most of which are in the unorganized sector. viz. The sector.500 crore.19 lakh tonnes in 1975 to 18. production of which has been increasing steadily in the country.1 million tonnes respectively. The two major bakery industries. about 35% is produced in the organized sector and the remaining is manufactured in the unorganized sector. rusk.. Of the total production of bread and biscuits. buns.Britannia Bread BAKERY INDUSTRY Bakery industry in India is probably the largest among the processed food industries.. biscuits. pastries. Indian Bakery sector is indicating significant growth both in terms of volumes and customer base. etc. is currently registering a 40% growth according to industry sources. which is estimated at Rs 3. is estimated to be in excess of 3 million tonnes. Bakery products once considered as sick man’s diet have now become essential food items of the vast majority of population. cakes. The annual production of bakery products which includes bread. The production of Bakery products has increased from 5.5 million tonnes and 1. The production of bread and biscuits in the country both in the organized and unorganized sectors is estimated to be around 1. bread and biscuit account for about 82% of the total bakery products.Cost Analysis .95 lakh tonnes in 1990 recording four-fold increase in 15 years. 7 | Page .

In India it is still a secondary staple food when compared to chapatti. Fibre-increased white breads. Having succeeded in garnering the trust of almost one-third of India's one billion population and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. Monginis. mixed grain bread. and in the north and eastern parts of the country. Though bread is not a staple food in the country.Britannia Bread Some of the well-known and most frequented bakeries in the country are Sweet Chariot. Birdie's. Rye bread INTRODUCTION TO BRITANNIA INDUSTRIES The story of one of India's favorite brands reads almost like a fairy tale. The company we all know as Britannia today is one of India’s best known brands and also one of the most admired Food Brand in the country. BREAD Bread is the cheapest and basic instant food available for consumption. in 1892 to be precise. its consumption has increased over the years. puri or rice. And millions of consumers will savors the results. The company has four production 8 | Page . Croissants in the west. Once upon a time. Whole meal or whole wheat bread. Kibbled wheat and cracked wheat bread. happily ever after. there are quite a few big players too. Daily Bread in Bangalore. Modern Bakery. 295.Cost Analysis . The different types of bread available are White bread. a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs.

Thus. BRITANNIA DAILY FRESH BREAD Till 1958.000 outlets across India.Cost Analysis . Tiger. Then. Britannia was not only the pioneer. It is the largest company in the food processing industry whose product range also includes breads and cakes. but also inculcated in the people of Delhi the habit of eating white sliced bread. a mechanised bread unit was set up in Delhi with the name "Delbis" which produced sliced bread and packed it under the Britannia name. there were no breads in the organized sector and bread consumption was a habit typified by the British. Nutri Choice. and sells its products in over 600. Milk Bikis. Little Hearts. Good Day. Daily Fresh Bread and Britannia Cakes. 4367 employees.Britannia Bread facilities. 9 | Page . Treat. Nutrichoice Digestive. The Britannia Brand is all about eating healthy for leading a better life. Marie Gold. Britannia has a basketful of goodies with biscuits like Nice Time. Pure Magic. Time Pass Nimkee. 50 50 Maska Chaska.

the 400gm and the 800gm plain white sliced bread . Britannia is widely recognized as an innovative marketer. The last couple of years also saw the introduction of Whole Wheat Bread as a part of "Eat Healthy.Britannia has evolved into a company offering 22 packs.Britannia Bread The Mumbai unit came up in 1963. which finds its way to over 6 lakh households daily.Cost Analysis . is the mainstay of the company’s non-biscuit business at present. Britannia Daily Fresh Bread. From a company offering 2 packs . and there again Britannia was the first branded bread in the city. Britannia hopes to drive this emerging business through the exploding modern trade and has already gained access to Reliance Retail. catering to a variety of taste and price segments in the bread consuming market. Trinethra and Fabmall for its breads. 10 | P a g e . Think Better" credo.

Cost Analysis .Britannia Bread SWOT ANALYSIS OF BRITANNIA BREAD 11 | P a g e .

1705 0.0282 0.805 0 5. Cost Per Unit Quantity Manufactured Quantity sold 1 1 100000 100000 CPU(Rs) DIRECT COST Raw materials consumed Opening stock of raw materials Purchases of Raw Materials (-)Closing stock of Raw Materials Materials Consumed Direct labour/wages Direct cost/expenses PRIME COST INDIRECT COST Factory/Works Overheads Indirect labour Depreciation on Machinery Works Overheads Cost of Maintanence Other Factory Expenses Supervisors Salary Power & Fuel 0 5.805 0.124 0.122 0.05204 0.5678 12 | P a g e .Cost Analysis .0589 0.675 0.0385 0.Britannia Bread COST SHEET OF BRITANNIA BREAD PROFORMA OF COST SHEET Cost sheet for every 1lac units produced and sold.2415 6.

Cost Analysis .0281 0.089 0.96029 1.25737 7.0585 0.97031 0.54244 7.057 0.Britannia Bread Total Overheads FACTORY COST/WORKS COST Office and Administrative Overheads Depreciation on office furniture@7% Office Rent Salary to Staff Office and General Expenses Telephone expenses Electricity and Lightings Printing and stationary Total Office and Administrative Overheads COST OF GOODS SOLD Selling and Administrative Overheads Sales Commission Salary of Salesman Carriage Outward Sales Expenses Total Selling and Administrative Overheads COST OF SALES PROFITS SALES Raw Materials Cost 1.0257 0.03123 0.1 0.0219 0.71294 0.705 0.98998 8.03971 10 13 | P a g e .00294 0.12798 0.

Some of the above Values are estimated 14 | P a g e .4781 5.805 NOTE The Value are determined on the basis of apportionment as the company produces more than one product (including fixed cost) Cost sheet for every 1lac units produced and sold.Cost Analysis .892 0.Britannia Bread Flour Water Yeast Salt Raw Materials per unit 3.6789 0.756 0.

Direct cost/expenses: 15 | P a g e .009% of the PRIME COST.124 per unit which is approximately 2. • • • • Flour Water Yeast Salt Direct labor/wages: Direct labor/Wages amounts to Rs.Cost Analysis .Britannia Bread COST SHEET ANALYSIS Direct Cost: Direct materials To manufacture one unit of bread the following RAW MATERIALS are required. 0. This percentage is low because a good amount of work is automated as a result of which Human resources are diverted to more productive areas such as SALES and MARKETING.

supervisors Salary and Power & Fuel.Cost Analysis .Britannia Bread Direct cost includes costs incurred in bringing the raw materials into the factory which is Carriage inward.7% of the FACTORY OVERHEADS. electricity and lightings • • Salary to staff: The salary paid to staff comes up to around Rs. Office and general expenses: This comprises of refreshments (tea and snacks). This value includes sweeper charges.122 per unit. Power: Per unit power and fuel consumption is Rs. It also includes the amount paid loading unloading charges and other petty expenses.5678.a. 0.089 per unit cost. Other factory expenses: Other factory expenses include maintenance of factory and other miscellaneous expenses. 0. Works Overheads. Depreciation on Machinery. 0. Other Factory Expenses. salary to staff. This value amounts to around 43. Postage and Telegrams. Postage and Telegrams and other petty expenses. telephone expenses. Indirect Costs: Factory Overheads: The Factory Overheads includes the indirect labor. • • Indirect labor: The amount of indirect labor is Rs. office rent. • • Office and Administration Overheads:Office and administration overheads include Depreciation on office furniture@7%. Cost of Maintenance. Depreciation on machinery: The depreciation is calculated on the basis of WDV calculated @ 10% p. office and general expenses. The percentage high because of the level automation and technology used for production. 16 | P a g e . support staff etc.

1 of the total per unit cost of the product. hoardings. Sales expenses : This includes expenses incurred on advertisements and promotional expenses such as newspaper advertisements. TV commercials etc. Discount allowed. • • • • Salary of salesmen : The average salary paid to the sales people is around Rs.Britannia Bread • • • Printing and stationary: This consists of photocopy charges. the transportations charge per unit/product is set as RS 0. printouts and other stationary items.Cost Analysis .12798. they are given commission of 5 % of the total sales done by them. 0. Carriage outward : To carry the finished goods to the whole sellers. Profit: 17 | P a g e . Electricity and lightings: It consists of office lighting and air conditioning expenses Sales and distribution overheads:Selling and distribution cost includes Sales Commission. Carriage outward and Sales expenses • Sales Commission : As a part of encouragement for sales people. Salary of salesmen. Discount allowed : To attract whole sellers to buy the product they are offered a discount of 5% on the selling price. Telephone Expenses: Calls made by the staff members.

etc.Cost Analysis . has definitely evolved as a substitute for chapattis.603% of the total per unit cost price CONCLUSION As per the study. such as brown bread. whole wheat bread. chutney bread. Britannia bread has acquired almost 50% stake in daily bread market. rotis. It is easily available due to its excellent distribution channels. 18 | P a g e .Britannia Bread The Profit arise out of selling per unit of the product is 11. rice. Today a variety of breads are available. we would like to conclude that bread not being the staple food in India. etc.

capitaline.com • www.britannia.co. Bibliography Online Sources • www.in • www.wadiagroup.com • www.Cost Analysis . Britannia bread has managed to capture a large market share not just in the urban but has also managed to penetrate the rural markets.google.Britannia Bread Even after having many competitors around.com 19 | P a g e .

Britannia Bread Books & Authors • Cost & Management Accounting – Ravi Kishore 20 | P a g e .Cost Analysis .

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